American Air Carriers Really Jacked Up Fees In 2012

Business Insider

In 2012, 14 major American airlines instituted 52 fee changes, nearly all of them designed to take more money out of travelers' pockets.

A study by TravelNerd, a traveler resource site, tracked changes in airline fees in 2012 and 2013. It found that of the 52 changes, 36 changes were direct fee increases.

The remaining changes are mostly designed to generate extra revenue as well: Some fees have been bundled or unbundled, others increase fee price ranges (Spirit's premium seat fee range went from $25-$75 to $12-$199).

Some airlines updated fee policies. For example, low-cost Allegiant still charges $50 for an overweight bag, but lowered the weight limit from 51 lbs to 41 lbs.

While TravelNerd notes that most of the changes will cost travelers only $5-$10, the charges add up: Americans spent more than $6 billion on airline fees in 2012, Derek Thompson at the Atlantic reported.

The steady rise in fees in recent years begs the question, when will travelers abandon low-cost airlines for those that charge more for tickets, but do not rely on fees for income.

A January study by Deloitte found Americans prefer value to luxury when it comes to flying; 49 percent of respondents ranked "value for money" as "very important."

But there must be a tipping point where the growing list of fees outweigh the savings of the cheaper ticket.

"The 'low-cost' sales pitch is already nullified by the extra costs travelers must pay," Alicia Jao, the VP of Travel Media at NerdWallet, which owns TravelNerd, told Business Insider in an e-mail.

Comparing average domestic airfare in 2007 and 2012, she noted, "travelers are paying the same for airfare today without all the extra services that once came with the ticket price."

Craig LaRosa, a principal at innovation and design consultancy Continuum, argues that tipping point has not been reached just yet. When it is, he says, it will either be because airlines reach a point where low ticket prices with high fees are no longer sustainable, or because "customers just finally give up."

But, he points out, many people need to travel by air. Flying may cost more than it did a decade ago, but it is still a necessity.

And for struggling airlines, fees are a major source of revenue, even as they destroy customer loyalty and make air travel a regrettable chore for the large majority of travelers.



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